Idea Stock Exchange

Retrospeak writes to tell us The New York Times has an interesting article on an interesting business strategy used by a company called Rite-Solutions. The system recognizes the need for harvesting ideas from the entire company instead of just one or two "idea-men" in a stock-market-esque idea exchange. From the article: "We're the founders, but we're far from the smartest people here," Mr. Lavoie, the chief executive, said during an interview at Rite-Solutions' headquarters outside Newport, R.I. "At most companies, especially technology companies, the most brilliant insights tend to come from people other than senior management. So we created a marketplace to harvest collective genius."

Hey

Can I sell ideas short?

Re:Hey

They call that "marketing".

Re:Hey

Re:

"We're the founders, but we're far from the smartest people here," Mr. Lavoie, the chief executive, said during an interview at Rite-Solutions' headquarters outside Newport, R.I.


  Admitting to the reality is actually a vital sign of the intelligence in the leadership. If you'd hire people more stupid than you in any intellectual business, you're f-d.

  I wish my boss would consider this fact in some areas more often :) I think it's a quite normal case in any IT company, the bosses are "oldschoolers", meaning sure they know how a pic cpu works and how perl text databases are cool, but their knowledge doesn't always map to the current situation out there. Transaction rdbms is the word, not a text database.

  I do understand that the bosses in situations like that usually do realize that their workforce is more talented or at least more up-to-date in the expertise, but unluckily for the workers, the selfpride of the bosses preceeds the rationality that you'd expect.

  Anyway, seems like one company (at least officially) is trying to fight the /disease/, i hope they do well and give a good example to the others.

  Ps. how would you fight this "pride" issue ? My current strategy is either to explain very calmly my selections in development paths or if that fails, just go along and point the primary reason out when it starts to fall apart... Humans are supposed to learn most from their "personal" failures.

Japanese methods?

Didn't the Japanese have methods like this way back in the 80s??

Re:Japanese methods?

My experience with employee suggestion systems or quality circles is exactly what the executives at this company are trying to avoid. An idea comes in, some big shot decides it's not worth pursuing, and the whole suggestion system/quality circle/whatever falls apart because employees get discouraged. These guys are willing to let their decisions be driven by internal market forces (the employees). Sounds like a pretty good process to me.

Yes, even the general public could brainstorm

Yes, in fact, the Japanese used this method to allow the general populace to brainstorm creative solutions to the country's most vexing problem. Unfortunately for them, the demographics of the country were such that the votes of children aged 5-12 largely determined the resulting solution [wikipedia.org].

GMD

I got great ideas

My ideas most involve inflatable sex toy, small rodent and chocolate spread. Where do I sign up?

A market for innovation

Just as stock exchanges and other markets have created the flow of money that has been the foundation of modern capitalism and the greatest wealth engine in the history of mankind, a market for innovation may well be the next step.

How often is the person with the idea and the vision the guy with the business smarts to capitalize on it? How often does a company with excellent execution thirst for the next big idea? A marketplace for ideas and innovation is possibly the solution to this.

It may be unpopular here, but in order to make such a market work properly, it's necessary to have the necessary protection for ideas and innovations - i.e., intellectual property laws need to be improved. That isn't to say that draconian laws are needed, but if I have an idea, I need a reasonable expectation that I will not get fleeced by offering it on a marketplace.

An efficient innovation market backed up by appropriate laws may well be the next driver of wealth.

It's a trap!

We're the founders, but we're far from the smartest people here

Anyone who submits an idea gets labelled "not a team player" for not backing management's ludicrous schemes.

It's a trap!

[/end Dilbert-esque paranoia]

Idea Stock Exchange

I'm going to short neoconservatism.

Art by committee...

The difficulty in any system like this is what I like to call the Artistic Paradox.

Great art comes from experience and talent. It almost always comes from the vision of a single individual. Truly fine art cannot be done by committee.

Thus while brilliant and committed people in business need the ideas of those people around them, a system like this can only serve as an inspirational tool for those people with talent. The idea is not the art, the execution of that idea is.

I have lots of great ideas, but no matter how many I give out, or see on the web, few, if any, ever get done. Why? Because I'm lazy.

This marketplace could easily give rise to dependence on it for ideas, and ignore the fact that people who can get things done often don't have the best ideas, but because they can accomplish them, are infinitely more valuable than the armchair quarterbacks scattered throughout a company. And asking people to implement ideas other than their own, even if they are objectively better, reduces a talented individuals ability to great true greatness.

-Ian

this is a win for everybody

>This marketplace could easily give rise to dependence on it for ideas,
>and ignore the fact that people who can get things done often don't
>have the best ideas, but because they can accomplish them, are
>infinitely more valuable than the armchair quarterbacks scattered
>throughout a company.

Those people you're mentioning who "get can things done," -- isn't it to their interest, and everybody's interest, that they are implementing the very best ideas available? It's not like anybody's suggesting that these people be fired -- if anything the value of what they're able to produce increases as they are given better projects to see through to completion.

And those "armchair quarterbacks" -- this term seems needlessly insulting, by the way -- if these quarterbacks are able to come up with the very best ideas in the company, shouldn't they receive all the encouragement in the world to dream up new ideas? And shouldn't they share the spoils of this success with the people who can implement these great ideas?

Seems to me that this stock exchange idea is win/win/win for the GTD people, the quarterback people, and the company as a whole.

If this is true, they'll succede

That's right, good ideas don't only come from one person in the 'idea department.' If this holds true, and people aren't punished for speaking up, they may be much better for it -- and be able to monitize those ideas. Many companies I have worked for in the past, have an 'open door' policy with opinions, ideas, and better ways to do things. Not once have I ever heard a success story from someone piping-up. Didn't someone say something about hiring people smarter than you?

How does valuation go?..

I have the feeling that an awful lot of ideas out there are the "penny stock" kind -- you know, the type you get a lot of spam about...

Good idea, but doomed to fail

It might've worked in Japan. It won't work in the Western world. Here's how it would most likely end up:

Some worker on the chain finds out that what he does could be streamlined. He commits some of his free time (you don't think you'll be allowed to hand in ideas during work hours, do you?) to write down his idea and submit it.

Middle management sees the idea, ponders it and punches as hard against it as it can, since it comes from one of the grunt workers and by default, they can't have good ideas. If they did, middle management could be sacked without a problem.

Should the idea somehow survive this pummeling, the middle manager will write his name onto it and ship it upwards. Where it's found to be great and the manager gets a huge bonus.

Should the grunt complain it was originally his idea, his reward is a pink slip.

Google

Isn't that what Google already does, with their personal project time and whatnot? That's how GMail got started, and Picasa, and probably a few other things.

Great....

Great concept but I can already envision a problem in the (lawless) US where an employee comes up with a great idea and some other employees leave to go pursue development and market delivery of said idea. And they get sued for idea theft or something along that line. What, did something similar happen with RIM / NTP where one great company developed a real, market demanded product that another (totally useless) company claimed was their idea? Hmm... food for thought in the mighty US, isn't it.

(long live Canada)

A good friend of mine...

...was among those who came up with the idea. He did note that there was a flaw in the plan, that is, not enough incentive for people to "buy" and "sell" stocks in these ideas, despite the few incentives put in place. The people at NYTimes are currently trying to think of a new incentive method to completely replace the current one, without costing the company much.

A great idea

Believe that patents and copyrights are sewage, and act on that belief accordingly.

If you did, you would have seen that the internet is more than a passing fad (1992), that Linux
was more than a "toy" os (1996), that the x86 architecture and the IBM compatable PC was going
to take over the market place(2000) inspite of it's original inherent design flaws. That p2p was going
to explode in usage, that ethernet would win out over Novell, and Token-Ring despite being
"technically" inferior. Plus you would have been able to anticipate the technology explosion
that happens every few years when a new technologies 18th annaversary approaches and patents start to
run out.

All to often, a companies version of a great idea is something that they can patent, sit on,
and collect royalities on without any real application usage or work. Well, bullshit - it's just
the opposite. A great idea is something that proliferates and spreads in usage freely, without
restriction.

In the age of...

...employment agreements where the employer claims dominion over something the employee thinks of when he's taking a dump in his house during his Christmas vacation, I don't see how anyone would be trusting enough to throw their good ideas out for the taking like that. What if the company takes your idea and makes billions with it? What's to prevent the company from screwing you from a compensation standpoint?

Not Quite New

There are plenty of online exchanges for info and ideas, even problems that need solutions that link corporate R&D, Universities, and individual scientists. This is how a lot of companies innovate today - through collaboration, called C&D.

Here's a few:

ninesigma.net
InnoCentive.com
Yet2.com

Oh great

Oh great, a ponzi scheme but with ideas.

Oh really

The system recognizes the need for harvesting ideas from the entire company [...] so we created a marketplace to harvest collective genius.

We call it "The Matrix".

Good to see the NY Times so up to date...

... what with the fact that HP came up with this first [destinationkm.com] in 1999.

(Knowledge gathered from the thought-provoking if slightly shallow "The Wisdom of Crowds" by James Surowiecki)

Stock Market?

I dunno if a stock market is the best way to model this, it feels more like a futures market to me.

"Idea Futures"

Really early in the Internet's history (about TEN YEARS ago!!!) there was a site called "Idea Futures" that did exactly what this article describes. It was pretty fun... I wonder if it's the same folks.

We are the Borg, resistance if futile

Even the Borg needed a queen.

You can already share your ideas on the Web

There are a number of "idea banks" already on the Web such as Should Exist [shouldexist.org] and Halfbakery [halfbakery.com]. These sites are a bit diffrent from the approach described in the NYT article though.

This and other business plan sources...

This and other business plans sources can be found in the book The Wisdom of Crowds [amazon.com] by James Surowiecki.

The smartest people here ...

The system recognizes the need for harvesting ideas from the entire company instead of just one or two "idea-men" in a stock-market-esque idea exchange. From the article: "We're the founders, but we're far from the smartest people here,"

I'm having an Enron flashback

When Pentagon tried this idea...

When Pentagon tried this [pbs.org] to help predict the outcomes of and details of conflicts, terrorist acts, etcaetera, the project went down in flames amid accusations of "trading in blood and destruction" and similar nonsense.

The idea is not entirely dead yet, and so the opposition continues its histerical "criticism [hangoverguide.com]" of it...

Wiki

You can't beat a wiki for this kind of thing. I don't mean the "formal" kind like wikipedia, but more like the original: c2.com's Portland Pattern Repository. That is the best place on the web to share random thoughts and opinions on software engineering. (However, it can be a bit messy at times.)

Kinds of ideas?

Are we talking multi-billion-dollar new business ideas, or just "Gee, my job would be a whole lot easier if they issued us with black pencils instead of blue ones" ? I can see why employees might be wary of submitting the first type, but the second type is just "I can see how to run this place a little better, but I don't have the authorisation to make the change."

Linux as a role model

That's a key lesson behind the rise of open source technology, most notably Linux. A ragtag army of programmers organized into groups, wrote computer code, made the code available for anyone to revise and, by competing and cooperating in a global community, reshaped the market for software. The brilliance of Linux as a model of innovation is that it is powered by the grass-roots brilliance of the thousands of programmers who created it.

Just in case anyone might wonder why this on /. ...

Hudsucker Proxy?

Did anyone else think of "The Hudsucker Proxy" when they read this article?

"What is it? A circle?"

"It's a hula hoop!"

"No one will ever buy that."

Virtual-reality prediction markets?

A related idea I had recently which I wanted to toss into the open...

Lately on slashdot we've been having a few stories about the (Snow Crash-like) Second Life virtual world, and its active virtual economy. Take this article from Wired:

Wired: Making a Living in Second Life [wired.com]

I think it would be quite interesting to try using Second Life's economy and scriptable world to create an in-game prediction market [wikipedia.org], similar to that described in the NYT article. Instead of using a purely reputation-based currency such a market could use the game's Linden Dollars, which can be exchanged with US dollars. The use of Linden Dollars would also help get around some of the anti-gambling laws one runs into when US dollars are involved. It seems that in-game scripts can communicate with external servers [secondlife.com] via email or XML-RPC, so one could probably have such an in-game script placing orders with a server running the open-source prediction market software like Foresight Exchange [foresightt...logies.com] or Zocalo [sourceforge.net].

One might even imagine creating a Futarchy-like [wikipedia.org] system, with bids made on decisions about how to make the market (or organization running the market) prosper in the Second Life world. That could be interesting. I've lately been musing a bit on how such a system might be a cute way to create a seed superintelligence, or more precisely, a self-improving collective intelligence.

More on prediction markets

I'm happy to finally see a slashdot story on prediction markets [wikipedia.org], like the one described in the article, as they're one of the neatest new concepts I've come across. They've shown themselves to be on average the most accurate way to predict future events, more accurate than, say, individual experts or opinion polls. Having people "put their money where their mouth is" greatly improves the quality of predictions.

If you've never seen a prediction market in action before, I highly recommend checking out the real-money Intrade [intrade.com] market, or the virtual-money Foresight Exchange [ideosphere.com]. At such markets you can get estimated probabities for almost any major event. Here's a few examples from Intrade:

* Sony Playstation 3 release before October 6: 33% chance
* Hillary Clinton to be the Democratic Presidential Nominee in 2008: 43.1%
* John McCain to be the Republican Presidential Nominee in 2008: 36.6%
* Osama Bin Laden to be captured/neutralised by 30 June 2006: 5.7%
* Donald Rumsfeld to announce his resignation on/before 31Dec2006: 18.5%
* Bird flu (H5N1) to be confirmed in the USA ON/BEFORE 31st December 2006: 70.0%

That said, I think the company described in the article can probably improve the way they handle their pay-offs. From the article:

At Rite-Solutions, the architecture of participation is both businesslike and playful. Fifty-five stocks are listed on the company's internal market, which is called Mutual Fun. Each stock comes with a detailed description -- called an expect-us, as opposed to a prospectus -- and begins trading at a price of $10. Every employee gets $10,000 in "opinion money" to allocate among the offerings, and employees signal their enthusiasm by investing in a stock and, better yet, volunteering to work on the project. Volunteers share in the proceeds, in the form of real money, if the stock becomes a product or delivers savings.

The wording in the article is a little ambiguous, but it seems that if you choose to bid on an idea which you "know" is good, and would be if it were selected as a product, if other people don't agree you lose your money. It would be better to have a system where if the stock isn't selected as a product, you get your money back. If the product is selected, you gain money if the product does well, and lose money if the product does poorly. This also adds an incentive for people to "short" popular ideas that they think are going to perform poorly.

1999 novel with web-based idea futures exchange

Earthweb by Mark Stiegler, pretty well-developed and depicted

Idea Theft?

I'm curious... What kinds of protections are built into this idea exchange to keep people from stealing one person's Billion dollar idea and then patenting it as their own? I'd hate to see some greedy bastards using this site, and end up creating the next SCO or Rambus style legal dispute.

Because we are the founders....

we own all of our employees ideas and we have a large legal team of patent experts....

To sum up our business, its to play teh lawsuit game, to sue any and everybody who uses any of the same ideas that the brains we employ come up with first. Or licenses those ideas to any who want to do them.

Since the USPTO is leaning towards the patenting of not just ideas but the thought of an idea......

http://www.commondreams.org/headlines06/0321-05.ht m [commondreams.org]

Let customers participate

Wouldn't it be valuable to let customers participate?

It probably wouldn't work for new product development, but it would be a very cheap way to find out which features your customers want in Version 2.

A bit of background..

This sounds like one application of the idea futures [gmu.edu] market concept, which has been kicking around in academic circles for about a decade now.

-jcr

We tried to get HP to do this...

But it was shot down by management.

I'm not kidding.

Crowds Are Only Wise Sometimes

Why is there such universal agreement in regards to this "wisdom of the market" concept. Who says? Where is the definitive proof. i play on the Foresight Exchange (www.ideosphere.com) with everybody else and it's NOT always right. The stock market makes poor decisions and often purchasing decisions are based on just how "off" experts say that the market is (Google is undervalued/overvalued, etc). I mean, it's fine if companies want to cull their employees for ideas but I hope they don't come under the delusion that just because everybody thinks its a good idea that means it will succeed. Doesn't anybody listen to their mothers anymore? --Just because everybody else is jumping off a bridge, would you do it to?

They have turned things around

There is a limitless number of ideas, but there is a limited number of experienced workers who can turn ideas into a product. Instead of collecting huge stacks of ideas and let the workers browse through them, the idea-makers should actively sell their ideas to the workers. I mean, workers usually have good ideas of their own, and don't need someone sueing them because they implemented an idea (which they thought up themselves) that already existed in the huge stack. I have no problem with people making money from generating ideas, but they should be part of the team that implements it. Usually it is not the basic idea that is implemented, but the implementation changes the idea until it is workable. The "idea-maker" could help in that, if he or she is really worth anything. But as it is proposed now, I see a huge stack of hare-brained ideas with, purely by chance an unintentionally, a few good ones among them. Which worker would want to go through that rubbish for inspiration?

Brunner again...

Doesn't this sound like the Delphi Boards in The Shockwave Rider?

ttyl
          Farrell

Novel idea?

How is it different from a discussion forum? Just create a Section called Suggestions & Feedback,
then Add Development section for threads that pass Suggestion phase.

On Jim Lavoie...

I worked for him before he left to found Rite-Solutions. Undoubtedly the best boss I ever had. He was always interested in what the people under him thought about what was going on in the company, and he sheiled employees from a lot of the crap from higher-ups once the company was acquired. It has been my opinion that that was primarily the reason he was 'asked' to leave; he stood in the way of alot of the changes that corporate wanted to make, because he didn't feel that they were good for the employees. I left the company not too long after he left; once Jim was out of the picture, corporate slowly but inexorably implemented all the changes that they had promised they wouldn't make back when they first acquired us. I had a list of 3, and once they hit all 3 I was out the door.

Not to mention that he threw the best company parties I've seen, before or since.

One of my biggest regrets is that I didn't take the opportunity he offered to me a few years ago to come and work for him. Unfortunately, I was just starting a family and had to follow the money. Several times a year I consider contacting RS to see if the offer's still good, but I'm currently riding out a project that would probably fail if I jumped ship, and I actually feel bad about that :(

Re:IP

Ideas don't come for free

Uhmm.. I just got an idea.. absolutely for free...
Nobody can make me pay to use my brain.

What are you? A commy? *shifty eyes*

Re:Rite Aid?

I dunno about you, but Rite-Aid got bought the fuck out here in Memphis. All the stores I've seen that belonged to Rite-Aid now have Walgreens signs plastered all over them. I fail to see how they're going to survive much longer without some major help.